§ I now come to the expenditure for the year. The National Debt services inside the fixed debt, charges come to £24,500,000. That includes certain sums for Sinking Fund, which I shall deduct later on, because it is quite obvious that you cannot continue the Sinking Fund when you are levying huge sums for war. For the first time we have a heavy debt charge in respect of borrowing for war, and the figures which I shall give will show what difference the War will make in the fixed debt charges of this country. I wish right hon. Gentlemen and hon. Gentlemen would always bear that in mind when they press for increased expenditure in one direction and another. There is an expenditure which is going to remain after this War. It is a very heavy expenditure, and for the first time I have got to budget for it in my annual statement. The annual fixed debt charge is £24,500,000. For a full year the National Debt Services outside the Fixed Debt charge, including interest on money borrowed, will come to £30,726,000, so there will be £55,226,000 payable, or if you deduct the whole of the Sinking Fund, then there is something not far short of £50,000,000 in interest on loans, in respect of money borrowed for the present War and debt charges in the past. I can only budget, as far as expenditure is concerned, upon two alternatives. Although it does not make any difference to proposals I am going to make, the House ought to know what the War will cost, on the assumption that it is a six-months' War, and what it will cost on the assumption that it is a twelve-months' War from the beginning of the financial year, whether it is 31st March or whether it is the 30th September. A War which lasts six months does not mean that the expenditure comes to an end at the end of the six months, for there will be some very heavy expenditure for months after the War whilst affairs are being wound up, which will be almost as heavy as the expenditure of the War. There will be armies in occupation, and there will be other expenses; and there will be bills in respect of contracts executed during the War. Probably the three or four months after the War may very well be more expensive to the Exchequer than the three or four months before the end of the War.1008
§ I would take first of all the assumption that it is a six-months' War. The National Debt Services inside the Fixed Debt charge in that case will be £24,500,000, and outside. £24,750,000, Road Improvement Fund £1,431,000, payments to the Local Taxation Account, £9,406,000, other Consolidated Fund Services, £1,697,000; total, £61,784,000 for Consolidated Fund Services. On ordinary Supply Services, we have only the token Votes for the Army and Navy, because we found it impossible to distinguish what was ordinary peace expenditure and expenditure upon the War. Therefore, we propose that the whole expenditure of the Army and Navy shall practically be covered by Votes of Credit. You cannot burden the officials of the Army and Navy with a system of bookkeeping at the present time which would force them to keep two separate accounts. Therefore, we are only putting what are practically token Votes for the Army and Navy, £15,000 for the Army, and £17,000 for the Navy. For Civil Services, £59,018,000; Customs and Excise and Inland Revenue, £4,788,000; Post Office Services, £26,836,000; total, £90,674,000. Now I come to Votes of Credit. That is where the real difference will come in between accounts like Estimate A and Estimate B. Estimate A, for six months, will be, Army £400,000,000, Navy £120,000,000; railways, compensation for bombardment, air raids, and miscellaneous civil expenditure. £11,000,000; compensation, provision of canteens, etc., under Defence of the Realm Acts, £7,000,000; advances to Allies and Dominions £100,000,000. The Votes of Credit will thus come to £638,000,000. That will give a total of £790,458,000. The suspension of the New Sinking Fund will be £3,780,000, and the balance will be £786,678,000. That is on the assumption that the War will come to an end by September.
§ Take the other estimate, the estimate that the War will continue throughout the financial year. The National Debt Services inside the Fixed Debt charge will of course be the same, £24,500,000. The National Debt Services outside the Fixed Debt charge will be £30,726,000. Road Improvement Fund will be the same as before; payments to the Local Taxation Account will be the same, and the other Consolidated Fund Services 1009 will be the same. The total of the Consolidated Fund Services will be £67,760,000. The ordinary Supply Services will be the same, £90,674,000. I come to Votes of Credit. The Army in that case would be £600,000,000 and the Navy would be £146,000,000. Air raids, compensation, etc., would be double the former estimate of £11,000,000, that is £22,000,000. Compensation and the provision of canteens proposed in the Defence of the Realm Acts would be £10,000,000. Advances to Allies and Dominions would be £200,000,000, and the total would be £1,136,434,000. Deduct the suspension of the New Sinking Fund, £3,780,000, and the net total would be £1,132,654,000. The cost of the War on an average throughout the year, apart from our advances to our Dominions and our Allies, would be something like £2,100,000 a day. It is a little less than £2,000,000 now, and it gradually will be increased to £2,200,000. But the average throughout the year, it is estimated, would be £2,100,000 a day.